Attention swung from the US–Iran conflict to the Federal Reserve meeting, after both sides paused strikes. The US ambassador to the UN said President Trump is prioritising diplomacy, while Iran halted retaliation against US bases; Trump also rejected reports of depleted US ammunition. CBS News reported Tehran says it is not in talks with Washington, apart from discussions with Oman on “mechanisms regarding maritime traffic” in the Strait of Hormuz. Markets are pricing a 64% probability that the FOMC keeps rates on hold at 3.50%–3.75% on Wednesday, following June CPI data pointing to cooler inflation, though last week’s move in Oil above $90 before easing to $82 on Monday kept the prospect of a hike in view.
Bitcoin slipped below $65,000 and traded at $64,648, capped by the 50-day EMA at $65,067, with the 100-day and 200-day EMAs at $67,759 and $73,465. RSI sat just above the midline as MACD faded; support levels were cited at $63,171, then $61,034 and $57,835, while resistance extended from $67,360 to $70,302 and $73,244 alongside the 200-day EMA at $73,465. Gold traded at $4,074 and remained rangebound in $4,000–$4,100, beneath the 50-day, 200-day and 100-day EMAs at $4,217, $4,298 and $4,352, with overhead markers near $4,282 and $4,432 and downside risk if $4,000 breaks.
Derivative Trading Strategies Amid Fed Uncertainty
We are advising derivative traders to prepare for heavy market swings this week as geopolitical tensions ease and focus shifts to Wednesday’s Federal Reserve rate decision. While the pause in US-Iran military action has pulled oil down to $82, the underlying inflation threat is not gone. We believe traders should keep a close eye on energy markets, as any sudden bounce back toward last week’s $90 crude price could quickly disrupt rate expectations.
Currently, the market is pricing in a 64% probability of the Fed holding rates steady at 3.50%-3.75%, leaving a notable 36% chance of an unexpected move. Historical data shows that during periods of Fed policy uncertainty, the CBOE Volatility Index (VIX) often climbs by 15% to 20% in the days surrounding the announcement. To navigate this, we suggest utilizing long straddles on broad market indexes to profit from sudden, post-meeting price swings.
Crypto and Precious Metals Bearish Setups
In the crypto space, we see a distinct bearish trend as Bitcoin trades around $64,648, sitting below its crucial 50-day moving average of $65,067. A failure to hold the immediate support at $63,171 could trigger a quick drop toward the $61,034 mark. We recommend that derivative traders hedge their portfolios by purchasing out-of-the-money put options to protect against a deeper correction.
Gold is presenting a similar bearish setup, trading at $4,074 and remaining firmly capped below its 50-day moving average of $4,217. If the critical $4,000 support level is broken, the lack of nearby moving-average support could invite heavy short-selling. We advise using bear call spreads to target overhead resistance levels while taking advantage of gold’s declining momentum.
